Israel seeks major arms deals with India

TEL AVIV, Israel, Feb. 4 (UPI) -- Israel may be on the brink of major defense sales to India following a visit by India's air force commander, Air Marshal Nak Browne.

Military sources say Browne was particularly interested in upgrading India's fleet of Israeli-built unmanned surveillance vehicles and acquiring the advanced missile defense systems that Israel's high-tech defense industry, the most advanced in the Middle East, is developing.

India has been discussing a possible "buy and build" deal involving the Iron Dome system, the only one of four air-defense systems under development to have been tested in combat, for some time.

The Indians also want to produce the system, developed by Rafael Advanced Defense Systems, under license.

Israel's Globes business daily reported in December that the Indians say Israel has agreed to such a sale. But there could be a major hitch because the United States provided much of the financing for Iron Dome's development and the Pentagon may not want the technology transferred to India, even though it's a leading U.S. ally.

India has also expressed interest in Israel's Arrow-2 anti-ballistic missile system manufactured by Israel Aerospace Industries and the Boeing Co. of the United States. But the technology transfer involved could impede any sale since U.S. approval would be required.

With a significant slowdown in the growth of high-tech exports to the United States and Europe, Israeli defense exporters are shifting their marketing focus to Asia.

The Indian air chief served in Israel as India's first military attache after New Delhi recognized India in 1997.

India is the world's biggest arms importer. Its total military expenditure in 2011, excluding nuclear weapons, was $44.28 billion, the Stockholm International Peace Research Institute states.

India is expected to spend up to $150 billion at home and abroad on modernizing its military over the next decade but the Indian government and military chiefs have urged an accelerated drive to build up a national defense industry to reduce military imports and is pressing suppliers like Israel to participate in joint ventures if they want a piece of India's defense business.

New Delhi also wants to bolster self-reliance as it seeks to extend its military reach beyond its home waters, in part to counter Chinese expansion into the Indian Ocean.

In October 2012, Israel Aerospace Industries, flagship of the Jewish state's defense sector, reportedly secured a $958 million contract from India's military to upgrade its IAI-built Heron and Searcher unmanned aerial vehicles.

UAVs are some of the biggest money-spinners for Israel's defense industry and India, which is engaged in a massive multiyear rearmament program, is a key customer.

Indian media reported that the deal covered some 150 UAVs acquired from IAI since the 1990s that are operated by India's army, air force and navy.

IAI won a $1.1 billion deal with the Indian navy in 2009 to provide advanced Barak-8 tactical air-defense missile systems for its warships.

The Indian army is jointly funding a project to adapt the Barak 8 into a multi-purpose weapons system.

Also in 2009, Rafael secured a $1 billion contract with New Delhi for 18 Spyder surface-to-air missile systems by 2012.

IAI sold the Indian air force three Phalcon early warning aircraft worth $1.1 billion in 2004.

All told, Israeli companies have sold India weapons and other military systems worth more than $10 billion over the last decade or so.

In 2007, Israel dislodged France as India's second largest arms supplier after Russia but there have been bumps.

In March 2012, India blacklisted state-owned Israel Military Industries, a major arms manufacturer, barring it from bidding for Indian defense contracts for 10 years on suspicion of involvement in a 2009 corruption scandal.

Israel's Haaretz daily observed at the time that the Indian decision was "expected to significantly impact IMI's activities in India, as well as that of other Israeli defense firms."

Israel is now one of the world's leading arms exporters, with most of its key customers in Asia and the developing world.

United Press International is a leading provider of news, photos and information to millions of readers around the globe via UPI.com and its licensing services.

With a history of reliable reporting dating back to 1907, today's UPI is a credible source for the most important stories of the day, continually updated - a one-stop site for U.S. and world news, as well as entertainment, trends, science, health and stunning photography. UPI also provides insightful reports on key topics of geopolitical importance, including energy and security.

A Spanish version of the site reaches millions of readers in Latin America and beyond.

UPI was founded in 1907 by E.W. Scripps as the United Press (UP). It became known as UPI after a merger with the International News Service in 1958, which was founded in 1909 by William Randolph Hearst. Today, UPI is owned by News World Communications.